Grayscale Seeks SEC Approval for Spot Avalanche ETF on Nasdaq

Grayscale has moved to broaden its digital asset lineup by filing an S1 registration with the U.S. Securities and Exchange Commission (SEC) seeking to convert its existing Avalanche Trust into a spot Avalanche ETF. This move aims to bring the spot Avalanche ETF to Nasdaq thereby making it accessible to a broader range of investors.

According to the filing, the proposed spot Avalanche ETF will issue shares in blocks of 10,000 referred to as “Baskets,” which authorized participants to create and redeem. Initially, the spot ETF will only accept cash orders with in kind creations and redemptions to be considered once regulatory approval is granted.

The spot Avalanche ETF will be administered by BNY Mellon while Coinbase will serve as both custodian and prime broker. CSC Delaware Trust Company will act as trustee for the spot ETF, so as to ensure a robust oversight and proper management.

A notable feature of the spot Avalanche ETF is its potential participation in AVAX staking under specific conditions. This could allow the spot Avalanche ETF to earn staking rewards although tokens may be temporarily inaccessible during staking periods.

Grayscale’s pursuit of a spot Avalanche ETF is part of a broader strategy to diversify its ETF offerings beyond Bitcoin and Ethereum. The company is also exploring spot ETFs for other digital assets including Solana, Cardano and Litecoin as well as a multi-crypto fund. The ETF represents a key milestone in this expansion.

The spot ETF filing comes at a time of significant developments within the Avalanche ecosystem. SkyBridge Capital recently announced plans to tokenize $300 million in assets on the Avalanche network while Toyota Blockchain Lab is preparing to launch its MON prototype using Avalanche’s multi-L1 architecture. These advancements further highlight the growing relevance of a spot ETF in today’s market.

Through the spot ETF, Grayscale seeks to offer investors regulated and transparent exposure to Avalanche underscoring its commitment to innovation in the digital asset market.

Going Forward

As the ETF progresses through the regulatory process, it is poised to become a significant addition to the expanding universe of crypto based investment products.